By Glenn Wheeler, president, Viewpointe Clearing, Settlement & Association Services
The payments landscape has been transforming. Jockeying for position are some major non-banking players – social networking sites, peer-to-peer payment services, mobile phone providers and credit card companies. As the competition heats up, the time horizon for establishing supremacy in the market will get shorter and shorter.
Some believe that banks, long the dominant facilitator of payments, will have problems reacting and adapting to this new paradigm. Certainly the evolving payments market presents new challenges for banks, but the situation might not be as dire as some have predicted.
There is no question customers are demanding convenience. According to a recent Bank Systems & Technology article, “Mobile Payment Users Expected to Surpass 375 Million by 2015,” market research firm In-Stat predicts that the number of mobile payment users globally will triple by 2015. Where will this demand be met? Well, there are a multitude of channels for customers to gain access to mobile payments; many do not require a financial institution. Consumers have many options: there is “virtual currency” offered by social networking mobile apps such as Facebook, "tap and pay" apps via smartphone using near-field communication (NFC) offered by Google and telecom providers, and mobile peer-to-peer services from PayPal, among others. Undoubtedly, there are additional mobile payment channels being innovated as I type this.
Banks are keenly aware of the risk mobile payments pose to a key part of their business. However, it is the security component of mobile payments that deserves a second look. Security is a differentiator and one in which non-bank providers may have a hard time competing with the banks. By developing capabilities for payment transactions that bypass financial institutions, thereby circumventing the advanced systems that help secure and oversee transactions, consumers could be at risk. Naive consumers might falsely believe that they have the same type of security and protection that they do with their bank. From an individual concern, payment data could wend its way without needed security and structure.
Certainly the mobile payment market is fascinating to watch. Who would have imagined 20 years ago that your wallet could very well be replaced by a mobile phone?
But will this technology disrupt or energize banks? While mobile payments pose some challenges, I believe banks will rise to the occasion, and many already have. Billions of dollars have been spent securing the existing payment ecosystem and new entrants have to play by the same rules. This is one area where banks clearly have a leg up, and are well-prepared for the challenges ahead. Banks, mobile payment providers and consumers should keep this in mind.
What do you think?
Showing posts with label Facebook. Show all posts
Showing posts with label Facebook. Show all posts
Tuesday, June 14, 2011
Thursday, February 17, 2011
Will Facebook replace the United States Postal Service?
By Flint Lane of Billtrust
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Tuesday, May 26, 2009
Web 2.0 Primer
Posted by Mark Brousseau
Twitter, MySpace and Facebook Demystified
by Ted Janusz
Q: I hear people talking about Websites like Twitter, MySpace and Facebook. All the kids seem to be using them. What are they? And, even more importantly, should I be using them to market my business?
Tools like Twitter, Facebook and MySpace are components of something else you may have heard people talking about: Web 2.0, which is a popular term for Internet applications for which the users are actively engaged in creating and distributing Web content.
Web 1.0 probably consisted of the Web sites you saw back in the late 90s, which were nothing more than fancy electronic brochures. Web 1.5 would have been something like Amazon or eBay, sites on which you can buy, sell and leave reviews. What Web 3.0 will look like is anybody's guess!
Let's look specifically at the three applications that you mentioned.
Twitter - "Twitter is like text messaging, only you can also do it from the Web," says Dan Tynan, the author of the Tynan on Technology blog. "Instead of sending a message to just one person, you can send it to thousands of people at once. You can choose to follow anyone's update (called "tweets") simply by clicking the Follow button on their profile, or vice-versa. The only rule is that each tweet can be no longer than 140 characters."
This is fine, but what is the business application of Twitter?
In the past, companies would need to spend hundreds of thousands of dollars on marketing research to find out what consumers were saying about them. Now companies like Comcast, Dell, HR Block, Kodak, Southwest Airlines and Whole Foods can "follow" what real customers are saying about them in real time. And they can answer questions and resolve complaints from real customers immediately, if they so choose.
The number one Web site in both the United States and the world is Yahoo. But in the U.S., the second most visited site is MySpace.
MySpace - Tom Anderson and Chris DeWolfe designed a Web site to provide a service at no charge to regular people looking for a way to connect with others having similar likes and dislikes. The site was initially popular with bands, who didn't want to go through the hassle of creating and maintaining a Web site, but sought a way to distribute their music, photographs, videos and other information to their fans and would-be fans. MySpace usage has since spread like wildfire to people of all interests and ages.
Yes, MySpace initially appealed to teenagers, but now half of the visitors to the site are age 35 or older as the site's demographic composition continues to shift.
What is the business application of MySpace?
Successful marketing using any of the Web 2.0 applications means an ad cannot look like an ad or else it will be rejected immediately by the social networking visitors.
To see how companies have successfully launched a presence on MySpace, check out Cartier International (www.myspace.com/lovebycartier) or Miss Helga, a spokesperson for Volkswagen (www.myspace.com/misshelga).
While MySpace is the number two Website in the United States, Facebook is the number two Website in the rest of the world and is rapidly closing in on MySpace in the US.
Facebook was originally created by Mark Zuckerman, intended for use by his fellow students of Harvard University as "The Facebook." It was meant to be an online replacement of the book one receives as freshmen when entering college or university containing photos and other information about our new freshman classmates. Within 30 days, about half of the students of Harvard had a profile on the site. Facebook soon spread to other Boston area colleges. Presently, approximately 85 percent of all college students have a presence on Facebook.
Facebook has been able to overtake MySpace as the number one social networking site in the world because it no longer has the stigma that it is "just for high school or college students." Anyone may now join Facebook.
Sites like MySpace and Facebook are so popular because social networking allows so much more than e-mail or text messaging. In addition to writing on someone else's "wall" on Facebook, sharing photographs and videos. Facebook is the number one photo-sharing site on the Internet. At a glance, you can see what all of your "friends" are up to. And because you choose your friends on Facebook, you can virtually eliminate spam, spam composes up to 90% of all e-mail.
What is the business application of Facebook?
People have a "profile" on Facebook, whereas a business has a "page." You and I can have "friends" on Facebook, while a business has "fans." Businesses on Facebook can really benefit from on Facebook is: the trusted referrals of their friends, which is something missing from the monologue of advertising.
There is a danger for businesses to view the social networking sites as the new television, but a business can advertise on them for free.
"If you are going to go there, you had better go for the right reasons," says Seth Godin, author of the best-selling book on marketing, Purple Cow. "And if your reason is to sell more stuff, please don't bother. It's not going to work. People don't care about you. They just don't.
On the other hand, if you can use social networking sites as ways to connect to real people, just for that sake alone, not because you want to sell anything, then it's a great way to spend a half hour a day."
Godin concludes, "And what we are finding, as a by-product of that . . . yes, in fact, your business will do better, because you are a trusted member of the community. Not because you are trying to sell stuff."
Ted Janusz is a professional speaker, author and entrepreneur, who presents "Web 2.0 - How to Harness the Power of Social Networking to Promote Your Business." Janusz has been invited to appear on the Geraldo show on FOX News Network.
Twitter, MySpace and Facebook Demystified
by Ted Janusz
Q: I hear people talking about Websites like Twitter, MySpace and Facebook. All the kids seem to be using them. What are they? And, even more importantly, should I be using them to market my business?
Tools like Twitter, Facebook and MySpace are components of something else you may have heard people talking about: Web 2.0, which is a popular term for Internet applications for which the users are actively engaged in creating and distributing Web content.
Web 1.0 probably consisted of the Web sites you saw back in the late 90s, which were nothing more than fancy electronic brochures. Web 1.5 would have been something like Amazon or eBay, sites on which you can buy, sell and leave reviews. What Web 3.0 will look like is anybody's guess!
Let's look specifically at the three applications that you mentioned.
Twitter - "Twitter is like text messaging, only you can also do it from the Web," says Dan Tynan, the author of the Tynan on Technology blog. "Instead of sending a message to just one person, you can send it to thousands of people at once. You can choose to follow anyone's update (called "tweets") simply by clicking the Follow button on their profile, or vice-versa. The only rule is that each tweet can be no longer than 140 characters."
This is fine, but what is the business application of Twitter?
In the past, companies would need to spend hundreds of thousands of dollars on marketing research to find out what consumers were saying about them. Now companies like Comcast, Dell, HR Block, Kodak, Southwest Airlines and Whole Foods can "follow" what real customers are saying about them in real time. And they can answer questions and resolve complaints from real customers immediately, if they so choose.
The number one Web site in both the United States and the world is Yahoo. But in the U.S., the second most visited site is MySpace.
MySpace - Tom Anderson and Chris DeWolfe designed a Web site to provide a service at no charge to regular people looking for a way to connect with others having similar likes and dislikes. The site was initially popular with bands, who didn't want to go through the hassle of creating and maintaining a Web site, but sought a way to distribute their music, photographs, videos and other information to their fans and would-be fans. MySpace usage has since spread like wildfire to people of all interests and ages.
Yes, MySpace initially appealed to teenagers, but now half of the visitors to the site are age 35 or older as the site's demographic composition continues to shift.
What is the business application of MySpace?
Successful marketing using any of the Web 2.0 applications means an ad cannot look like an ad or else it will be rejected immediately by the social networking visitors.
To see how companies have successfully launched a presence on MySpace, check out Cartier International (www.myspace.com/lovebycartier) or Miss Helga, a spokesperson for Volkswagen (www.myspace.com/misshelga).
While MySpace is the number two Website in the United States, Facebook is the number two Website in the rest of the world and is rapidly closing in on MySpace in the US.
Facebook was originally created by Mark Zuckerman, intended for use by his fellow students of Harvard University as "The Facebook." It was meant to be an online replacement of the book one receives as freshmen when entering college or university containing photos and other information about our new freshman classmates. Within 30 days, about half of the students of Harvard had a profile on the site. Facebook soon spread to other Boston area colleges. Presently, approximately 85 percent of all college students have a presence on Facebook.
Facebook has been able to overtake MySpace as the number one social networking site in the world because it no longer has the stigma that it is "just for high school or college students." Anyone may now join Facebook.
Sites like MySpace and Facebook are so popular because social networking allows so much more than e-mail or text messaging. In addition to writing on someone else's "wall" on Facebook, sharing photographs and videos. Facebook is the number one photo-sharing site on the Internet. At a glance, you can see what all of your "friends" are up to. And because you choose your friends on Facebook, you can virtually eliminate spam, spam composes up to 90% of all e-mail.
What is the business application of Facebook?
People have a "profile" on Facebook, whereas a business has a "page." You and I can have "friends" on Facebook, while a business has "fans." Businesses on Facebook can really benefit from on Facebook is: the trusted referrals of their friends, which is something missing from the monologue of advertising.
There is a danger for businesses to view the social networking sites as the new television, but a business can advertise on them for free.
"If you are going to go there, you had better go for the right reasons," says Seth Godin, author of the best-selling book on marketing, Purple Cow. "And if your reason is to sell more stuff, please don't bother. It's not going to work. People don't care about you. They just don't.
On the other hand, if you can use social networking sites as ways to connect to real people, just for that sake alone, not because you want to sell anything, then it's a great way to spend a half hour a day."
Godin concludes, "And what we are finding, as a by-product of that . . . yes, in fact, your business will do better, because you are a trusted member of the community. Not because you are trying to sell stuff."
Ted Janusz is a professional speaker, author and entrepreneur, who presents "Web 2.0 - How to Harness the Power of Social Networking to Promote Your Business." Janusz has been invited to appear on the Geraldo show on FOX News Network.
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